PINEDA VS CA
FACTS: Spouses Benitez mortgaged a house and
lot in favor of Juanita P. Pineda and Leila P.
Sayoc which was not registered . With the
consent of Pineda, spouses Benitez sold the
house, which was part of the Property, to Olivia
G. Mojica (“Mojica”). On the same date, Mojica
filed a petition for the issuance of a second
owner’s duplicate alleging that she “purchased
a parcel of land” and the “owner’s duplicate
copy was lost.” The same was granted.
The lot was also subsequently sold to Mojica.
Mojica executed a deed of mortgage over the
same property in favor of Gonzales which deed
was registered. Pineda and Sayoc filed a
complaint against the Spouses Benitez and
Mojica. The complaint prayed for the
cancellation of the second owner’s duplicate.
During the pendency of the case, Pineda caused
the annotation of a notice of lis pendens. The
Court ruled that the second owner’s duplicate
was void.
Meanwhile, Mojica defaulted in paying the
obligation to Gonzales so the latter foreclosed
the mortgaged and purchased it at the auction
sale. A new TCT was issued in the name of
Gonzales.
Pineda and Sayoc filed a motion with the trial
court for the issuance of an order requiring
Gonzales to surrender the owner’s duplicate of
TCT to the ROD.
The Trial Court declared the title of Gonzales as
void and ordered the reinstatement of the TC in
the name of Spouses Benitez. The CA ruled in
favor of Gonzales.
ISSUES: 1.Whether the mortgage to Gonzales is
valid. YES
2.Whether Gonzales is an innocent purchaser/
mortgagee for value. YES
HELD:
Mojica’s Title is Void Since the TCT of the
property was not actually lost but was in the
possession of Pineda, the reconstitution
proceeding and the second TCT issue in favor of
Mojica by virtue of the sale were void.
However, the prior mortgage of the Property by
the Spouses Benitez to Pineda and Sayoc did
not prevent the Spouses Benitez, as owners of
the Property, from selling the Property to
Mojica. A mortgage is merely an encumbrance
on the property and does not extinguish the
title of the debtor who does not lose his
principal attribute as owner to dispose of the
property. The law even considers void a
stipulation forbidding the owner of the
property from alienating the mortgaged
immovable.
Since the Spouses Benitez were the undisputed
owners of the Property, they could validly sell
and deliver the Property to Mojica. The
execution of the notarized deed of sale
between the Spouses Benitez and Mojica had
the legal effect of actual or physical delivery.
Ownership of the Property passed from the
Spouses Benitez to Mojica. The nullity of the
second owner’s duplicate of TCT did not affect
the validity of the sale as between the Spouses
Benitez and Mojica.
Gonzales is an Innocent Purchaser for Value The
nullity of MOjica’s title does not automatically
carry with it the nullity of the annotation of
Gonzales’ mortgage. The rule is that a mortgage
annotated on a void title is valid if the
mortgagee registered the mortgage in good
faith.
Gonzales registered her mortgage in good faith.
Gonzales had no actual notice of the prior
unregistered mortgage in favor of Pineda and
Sayoc. To bind third parties to an unregistered
encumbrance, the law requires actual notice.
The fact that Mojica, who sold the Property to
Gonzales, had actual notice of the unregistered
mortgage did not constitute actual notice to
Gonzales, absent proof that Gonzales herself
had actual notice of the prior mortgage. Thus,
Gonzales acquired her rights as a mortgagee in
good faith.

When Mojica defaulted in paying her debt,

Gonzales caused the extrajudicial foreclosure of
the mortgaged Property. Gonzales purchased
the mortgaged Property as the sole bidder at
the public auction sale. For Mojica’s failure to
redeem the foreclosed Property within the
prescribed period, Gonzales consolidated her
title to the Property. Absent anyevidence to the
contrary, the sale at public auction of the
Property to Gonzales was valid. Thus, the title
or ownership of the Property passed from
Mojica to Gonzales. At this point, therefore,
Gonzales became the owner of the Property.
When Gonzales purchased the Property at the
auction sale, Pineda and Sayoc had already
annotated the lis pendens on the original of TCT
8361, which remained valid. However, the
mortgage of Gonzales was validly registered
prior to the notation of the lis pendens. The
subsequent annotation of the lis pendens could
not defeat the rights of the mortgagee or the
purchaser at the auction sale who derived their
rights under a prior mortgage validly registered.
The settled rule is that the auction sale
retroacts to the date of the registration of the
mortgage, putting the auction sale beyond the
reach of any intervening lis pendens, sale or
attachment.